Long-term risks and opportunities

We believe it is important to consider risks and opportunities over the time horizon that we will be paying pensions. The Railways Pension Scheme has sections which remain open to new joiners and this gives us a truly long-term focus.

We integrate climate risk considerations into our investment process and encourage our portfolio companies to improve their disclosures to support their transition to a low-carbon economy. We will also use our capital to take advantage of targeted opportunities which aim to generate a positive impact alongside a financial return.

Consistent with the disclosure theme in our global voting policy, we are signatories to the following initiatives related to climate risk management:

Task Force on Climate-related Financial Disclosures

We support the Task Force on Climate-related Financial Disclosures (TCFD). This disclosure framework, published in June 2017, asks companies to disclose their governance, strategy, risk management and metrics and targets related to climate risk.....

Climate Action 100+.

In 2017, Railpen also signed up to Climate Action 100+ a five-year climate risk initiative intended to co-ordinate pressure on companies to cut greenhouse gas emissions, and improve disclosure and oversight of climate-related risks. Climate Action 100+ is aligned with the TCFD, which we are proud to support....

Transition Pathway Initiative.

In 2017 we built upon our support for the CDP (formerly the Carbon Disclosure Project) when we became a founding supporter of the Transition Pathway Initiative alongside 12 other leading international asset owners. The initiative will assess how individual companies are positioning themselves for the transition to a low-carbon economy through a public, transparent online tool.

Measurement of Carbon Footprint and Montreal Pledge Statement

We have commissioned a third party to assess the carbon intensity of the RPS equity portfolio. The results indicate that the carbon intensity of the portfolio is greater than of the index selected for comparison.

We have assessed our equity portfolio to have a weighted average carbon intensity of 366.1 tCO2e/GBPm as at 30 November 2018.

This compares to a weighted average carbon intensity of 338.8 tCO2e/GBPm for the MSCI All Country World Index (ACWI) at the same date.

It should be noted that the portfolio is not benchmarked against the index, but managed to achieve particular return and risk objectives.